Leasing Shares – Is it possible to rent stocks?

Leasing is rapidly becoming one of the most talked about stock market investment strategies. More and more investors are seeking to generate income from their stocks and capital from asset growth. But what is a shared lease? Is it legal, anyone can do it? Let us take a look at the basic concept of leasing stocks to see whether this investment strategy is everyone should see.

Leasing stocks are rapidly becoming one of the most talked about securities market investment strategy. More and more investors are seeking to generate income from their stocks and capital from asset growth. But what is a shared lease? Is it legal, anyone can do it? Let us take a look at the basic concept of leasing stocks to see whether this investment strategy is everyone should see.

Leasing a stock is very similar to renting your property. The basic rental strategy is as follows.

Step 1 / Purchase of a share . If you are in Australia, you will need to purchase a large number of 1000, while in the United States you can buy a large number of

Step 2 / Sell a month phone option, a strike price.

Step 3 / Enjoy your own month For example go to the beach, Etc.

Step 4 / This will depend on The share price is at the end of the month. Read below to find out more about leasing stocks.

Now if this does not make sense, I will now try to explain it in more detail.

Why You Need to Buy Your Stock in 100 (1000 in Australia) The portfolio involves Step 2. Call options are sold with a large number of 100 shares, for example if you buy a call option you actually buy Call options 100 shares.

What is a call option? A call option gives the buyer the right, but is not obliged to purchase a set number of shares at or before the set date at a predetermined price.

For example, the stock ABC traded at $ 100 and someone bought a $ 105 call option, which lasts a month. This will give them the right to buy ABC for $ 105, regardless of the actual price of ABC at any time of the following month. In order to get this right, the person who buys the phone needs to pay the seller the premium.

This is where we come in. The person who rents out their stock is paid by the person buying the call option. Therefore, we assume 100 US dollars to buy 100 shares of ABC shares. The next thing we need to do is sell a guaranteed call (because we actually own the stock). We always want to sell a call (beyond the actual price of the stock). Why, if we are forced to sell our stock, we will at least be forced to make a profit. For a phone call sold for $ 105 a month, we may receive a share price of about 3-6%. So, in this case, we assume that we receive $ 5 per share.

I'm sure you do not need any help with Step 3, but you might wonder why we can simply forget about our shares, not monitor them every day. The answer is very simple, because we do not care about their stock price is up or down. why? Well, let's see what happens if the stock goes up, down or sideways.

Although the actual price is $ 108, we will have to sell our stock $ 105. Like a very bad out, but if you have a closer look at it is actually a great result. We bought our stock $ 100, sold them for $ 105 and also got $ 5 for payment. So we actually made a profit of $ 10, and if we just bought the stock instead of renting them out, we would only get $ 8.

] The share price is set sideways and remains at $ 100.

Will keep our shares because no one will pay $ 105 in stock and can buy $ 100 in open market. So, in this case, our profit is $ 5, and if we do not lease our shares, we will not earn a point.

Share price down to $ 95

Once again, we will keep our stock. If we did not rent out our shares, we would lose $ 5, but because we received a premium of $ 5, we were not actually getting one point loose.

So, you can see that leasing stocks is actually a safe wealth creation strategy. In fact, what you are doing is trading your potential, earning a huge income within a month and regular monthly income. Which one is better? If you average your percentage return from a lease in a year, you may be surprised at its efficiency. Stock leasing returns generally fluctuate from 20-80% per annum. The average level is about 40% – better than the bank interest, I am sure you will agree.